Tesla’s robotaxi future jolted as Elon Musk’s political gamble backfires

New Delhi: Tesla stock nosedived more than 14% on Thursday, erasing nearly $150 billion in market value, as a public spat between Elon Musk and former U.S. President Donald Trump sent shockwaves through investors, NewsDrum reported.

The trigger: Trump’s veiled threat to cut federal subsidies and government contracts awarded to Musk’s companies.

The controversy stems from a political disagreement over a Republican budget proposal. After Musk said that Trump “wouldn’t have won without his help,” the former president responded on Truth Social, his proprietary messaging platform:

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”

The sharp correction in Tesla’s share price partially reversed an eight-week rally that followed Musk’s announcement of Tesla’s robotaxi initiative. The company had confirmed plans to begin testing its autonomous, driverless taxi service in Austin, Texas, later this month, an effort seen by analysts as Tesla’s next major revenue engine.

But the political friction has led to renewed investor concerns that a potential Trump administration could raise regulatory hurdles for Tesla’s self-driving ambitions.

“There is a fear that Trump is not going to play Mr. Nice Guy when it comes to autonomous,” said Dan Ives, analyst at Wedbush Securities. “The whole goal of robotaxis is to have them in 20 or 25 cities next year. If you start to heighten the regulatory environment, that could delay that path.”

Although Trump’s post did not mention Tesla directly, analysts and political observers believe the threat was aimed not only at the electric car maker but more directly at Musk’s other company, SpaceX.

SpaceX, which remains privately held, has been a key partner for NASA, ferrying astronauts and cargo to the International Space Station and spearheading the development of the Starship rocket for lunar missions. The company has received billions of dollars in contracts under successive administrations. Industry insiders believe it is central to U.S. space dominance in the coming decade.

A subsidiary of SpaceX, Starlink, has also benefited from Musk’s growing influence. During a trip to the Middle East last month, where Musk reportedly accompanied Trump, Saudi Arabia granted approval for Starlink’s satellite internet services for aviation and maritime sectors. The deal followed a string of Starlink announcements in countries like Bangladesh, Pakistan, and India, many of which coincided with U.S. trade diplomacy or Trump’s global outreach.

Whether political alignment helped fast-track these regulatory clearances is unclear. However, investors note the timing of these announcements and deals may now face fresh scrutiny.

In another sign of SpaceX’s meteoric rise, a recent private fundraising round reportedly pushed the company’s valuation to $350 billion, up from $210 billion just a year ago.

Tesla, on the other hand, has long walked a tightrope between technological optimism and political volatility. The EV giant saw its stock surge after Trump’s return to political prominence, with shares peaking on December 17. But the renewed friction with Trump, following Musk’s brief stint heading a government cost-cutting advisory group, has investors once again questioning Tesla’s policy risk exposure.

While Musk has previously leaned on his ability to navigate both business and political circles, Thursday’s events show that even one of the world’s richest men may not be immune to the cost of a public feud, especially when it plays out on social media platforms with billions at stake.